Thu, 15 Apr 2004

Reason and Action

Von Mises, in Human Action, pointed out that people take action to change the future. The past is fixed and cannot be changed. Any action must be in response to a dislike or unease with the anticipated future. This unease exists because a person is applying a value judgement to the anticipated future. What is expected to happen is bad, and what they want to have happen is good. Or, succinctly, people take actions for a reason.

Obviously, individual actions and reasons are always considered by the individual to be for the benefit of the individual. Nobody deliberately harms themselves. Even though the action and reason may be judged by other people to be good or bad for that individual, the individual himself always considers both the action and reason to be beneficial to himself. Altruism is seen by the individual as enhancing her reputation. There are no exceptions to this rule. Even insane people consider what they do to be good.

So, the only time someone is going to judge an action or reason as bad is when they're judging someone else's actions (or if they're judging their own past actions, but I don't want to talk about that here).

You may have noticed that I keep talking about both actions and reasons. That's because I want to consider them separately. It's interesting that some people refuse to consider them separately. Sometimes people criticize free markets because the participants do not have the goal of improving society even though that is exactly what happens. Some people praise actions which are bad for society, such as fair trade, or minimum wage laws, because those actions are taken for a good reason.

These people are poor economists. Even worse, they take that as a compliment. I believe that this is mostly because they do not understand what constitutes good economics. A good economist will not allow the reason for doing something to override the effects of the action itself. I'm not alone in saying this: "Ye shall know them by their fruits" and "The road to hell is paved with good intentions."

Not all economists are worthy of the name. Imagine if anybody in the following set of people called themselves physicists: perpetual motion kooks, flat earthers, Velikovskians, and finally, the intellectual sons and daughters of Newton, Einstein, etc. Unfortunately, there's a lot of pseudo-scientists in the field of economics, and some of them graduated from Harvard, Princeton, and Yale, so a storied college degree is no help.

Criticize economics if you must, but at least take the time to understand that which you criticize!

Posted [17:43] [Filed in: ] [permalink] [Google for the title] [digg this]